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A significant chapter in fashion and entertainment industry controversy has concluded as Adidas reaches a settlement with rapper Ye (formerly known as Kanye West), marking the end of their tumultuous partnership that began unraveling in 2022.
The settlement, announced on October 29, 2024, will provide Adidas with a €100 million boost to its operating profit, following the unwinding of previous legal provisions. CEO Bjørn Gulden confirmed during a press call that both parties have withdrawn all claims without any financial obligations. "No one owes anybody anything anymore. So whatever was is history," Gulden stated, emphasizing the clean break between the entities.
The partnership's dissolution stemmed from Ye's controversial anti-Semitic statements on social media platforms in 2022, prompting Adidas to terminate their collaboration. The aftermath left the sportswear giant managing approximately $1.3 billion in unsold Yeezy merchandise, which they've been strategically liquidating throughout 2023 and 2024.
The settlement arrives during a period of remarkable recovery for Adidas. The company has raised its annual profit forecast for the third time in 2024, projecting operating profits of around $1.3 billion, significantly higher than the previous $1.08 billion estimate. This upward trajectory suggests successful implementation of Gulden's revival strategy, particularly evident in the strong third-quarter performance across major markets.
In a noteworthy development, Adidas has committed to charitable initiatives, pledging to donate an amount equivalent to the €100 million provision to various organizations. This decision aligns with the company's efforts to address the controversial nature of the partnership's end and its aftermath.
The settlement's timing is particularly significant for both parties. Earlier in 2024, Ye had publicly acknowledged financial struggles, claiming he was "two months from going bankrupt" following the partnership's termination. The Yeezy line, which once contributed approximately half of Adidas's total profits according to industry analysts, represented one of the most lucrative collaborations in fashion history before its controversial conclusion.
